giofranchi

Shrewd investors! Aren't they? ;) Cheers, Gio

The fact these contracts appreciated during Q1 2015, despite the massive money printing effort that's going on in Europe, might not be meaningful, but should be at least pointed-out. Gio

Insurance results keep getting better. And I like the newly annuonced acquisition by Fairfax Asia. Fairfax Asia has an history of writing very profitable contracts, probably because the insurance market in those places is still very lowly penetrated. The Fairfax's strategy of gradually building scale over there is imo to be praised. Cheers, Gio

Cheers, Gio PRFFH-May-4-2015-Fairfax-to-become-Strategic-Investor-of-BIDV-Insurance-Vietnam.pdf

Q1 2015 Conference Call Transcript Cheers, Gio fairfax-financials-Q1-2015-conference-call-transcript.pdf

I have just bought more PSH. Cheers, Gio

You are talking about the FFH stock price. I don’t talk about what a stock price will do in the future. Instead, I am talking about the billions from its bonds portfolio, its equity hedges, and its CPI-linked derivative contracts. And about the assets FFH might be able to buy with those billions. Cheers, Gio

I agree. Period. But I would also add that, when I buy a business, what happens from April until January of the next year is only part of the picture. And multiple expansion is only the frost on the cake. No, I don’t think either GLRE or TPRE are as well positioned as FFH. I don’t think OAK is as well positioned as FFH. I don’t think KO nor other blue chips are as well positioned as FFH. If we really end-up having deflation, it is true GLRE, TPRE, OAK, and KO will still make some money, but will most probably surprise on the downside. FFH’s business results, instead, might very well surprise on the upside. This is very important imo, not because FFH’s stock price will perform better than the rest… If I am invested in FFH today, it is precisely because I am agnostic about stock price movements… I simply don’t know how stock prices will move. Instead, it is important because FFH in that situation might come to possess the wherewithal to buy lots of greatly productive assets at bargain prices. Much more than GLRE, TPRE, OAK, and KO will be able to do. Carnegie, Rockefeller, Mellon, etc. all have become fabulously rich that way. No one knows if that will happen again. But, even if there were only very slight chances, I want to participate. Cheers, Gio

I agree Eric. The fact still remains: in today' market there is no place to hide... you might either choose to hold cash, or you might choose to buy a business which itself is holding lots of cash and is positioned to perform very well in a difficult environment. There are no bargains out there (at least that I know of!). But, if you know a business which is better positioned and more atteactively priced than FFH, I am always interested to know what you think! Cheers, Gio

--Bobby Jones From the book [amazonsearch]Crazy is a Compliment[/amazonsearch] by Linda Rottenberg, Co-founder and CEO of Endeavor. Highly recommended! :) Cheers, Gio

I am not so sure about it… If FFH only had lots of cash to use in a market correction, I would agree with you. But FFH also has equity hedges that probably will make more money than the money it would lose on its equity investments, FFH also has a bond portfolio that will probably make even more money in a difficult environment, and FFH also has CPI-linked derivative contracts that could turn-out to be great winners in a deflationary environment. Therefore, FFH will actually make more money in a difficult environment than in a muddle through environment. I think the market knows this, but it is simply expecting the muddle through scenario to be much more likely than the deflationary one. If and when conditions change, who knows what might happen to FFH’s stock price? Cheers, Gio

Why the jump in share price yesterday and today? Any noteworthy piece of news that I have missed? ??? Gio

Reflect your belief that is attractively priced? Or are dollar-cost averaging? I think it is attractively priced… As a very long term investment and if a more difficult environment awaits us. In case something goes wrong with this global deleveraging, and we actually get to see deflation or a stock market that goes down and stays down for some time (or both), FFH imo might truly succeed in compounding at 15% annual. If FFH compounds at 15% annual, there is no reason why 10 years from now it won’t trade at the same multiple it is trading today. This of course would mean a 15% CAGR for my investment. Of course it won’t happen if central banks succeed in resolving our debt situation without any harmful consequences, and if the stock market keeps marching upward undisturbed. Gio

I am buying FFH today, and I'll be buying BH in two weeks (if its price stays this low or is lower). Cheers, Gio

Hi Gary, I am actually! :) And I would say the Campus of the University of Waterloo is getting better and better, putting to shame many campuses of the most prestigious universities in Europe. I think it is something to be proud of! Cheers, Gio

Back at the office today, after a very pleasant trip first to Ottawa then to Kitchener-Waterloo, where I was born and where I remember spending many summers as a kid with my parents, while they were lecturing at the University of Waterloo. It has been very nice indeed to see those places again! :) The two most important takeaways from the FFH annual meeting imo follow: 1) FFH remains the only investment I know which will perform well, should something seriously go wrong with this global deleveraging we are living through. With “should something seriously go wrong” I mean: stock prices correct violently downward AND STAY DOWN FOR A PROTRACTED PERIOD OF TIME. 2) FIH is a vehicle that should be able to compound at high rates of return for a very long time to come. Cheers, Gio

Yes! Thank you very much, Sanjeev! Sorry I wasn’t able to attend your annual meeting after the FFH’s, but Laura was tired and I HAD to behave more like a tourist than like an investor… I hope you understand what I mean! ;) Cheers, Gio

--Prem Watsa at the 2015 FFH Annual Meeting Gio

Wow! Impressive! I certainly cannot get even close to your personal record, but I surely could run faster: 10 km in 50 minutes is just my basic training schedule. :) Cheers, Gio

+1! ;) Gio

Sincerely I am not worried about valuation for any investment of mine. I think they are still all undervalued. This being said, in an environment of elevated general stock market prices I look for businesses with lots of cash and a management with the reputation of aggressively deploying cash reserves, when great opportunities come their way. Gio

I think there are at least three features which could not be easily copied by a single investor, nor by another investment fund: 1) FIH’s proprietary research capabilities and broad network in India 2) FIH’s attractive structure for long-term investments (permanent capital) 3) FIH’s access to private equity type investments Gio

And that's exactly why I invest in FIH, while I don't invest in Senvest Capital (with all due respect for Senvest!). ;) Gio

It is not “my logic”… It is math. If Senvest Capital has the same CAGR I expect of FIH, and I am using here the number Packer has calculated 15.8%, an investor who bought at 1.2xNAV 15 years ago has enjoyed a CAGR for his/her investment of 14.4%, provided Senvest Capital trades at BV today. Would you call a 14.4% CAGR sustained for 15 years a bad investment? I don’t think so. Gio

This doesn’t bother me at all. I am used to very lumpy results and have come to accept by now that events which lead to market beating results don’t come often and materialize only once in a while… Still they make a very important difference over time! This also doesn’t bother me much: the Indian stock market is over $1 trillion, and on top of that there is the private market to which FIH will surely have access. Both the Indian stock market and the private market will grow with the economy. I think there will be plenty of opportunities for many years to come. 15.8% annual imo is nothing to complain about! ;) Moreover FIH will have access to private equity type of dealings, which probably were precluded to the HWIC Asia Fund. And it will operate in a more business friendly environment (also inflation is clearly trending down since 2012). Cheers, Gio